If you’re like most parents of teenage children, you’re probably wondering when to cut the so-called financial cord. Sure, you want to make certain your adolescent has a nice place to live, a good education and plenty of healthful food, but should you also pay for their car insurance, telephone or social entertainment? We took a look at what experts have to say about this parental financial dilemma. Here’s what we found out.
Start your child’s lifelong financial education early
David Bakke is a widely published personal finance reporter. He recently told Bankrate magazine that his parents insisted that he earn his own money and save up for his own car. He also said that it was one of the soundest decisions his parents ever made. Kids who become contributing family members at a young age tend to be more responsible, especially in comparison to kids who get a handout every time they present their palm.
Whether they realize it or not, parents set an example that teaches their kids how to handle money. This example may be positive or negative. Parents who’ve gotten into trouble with credit can turn the lesson around if they enroll in and follow through with a debt payment program. Obtain more information from a professional credit counselor.
Before adolescence is the right time to talk to kids about income. Around the age of eight, you can begin to ask questions such as “What do you want to do when you grow up?” and “If you could have any job in the world, what would it be?” Talk about how much those jobs pay and learn what skills are required to be hired in such a position.
Once kids are ten years old, it’s time to open a saving account that will stand them in good stead when they’re teenagers. When your pre-teen wants something pricey like a new bicycle, let them add to the account with monies earned from extra household duties and neighborhood chores. Don’t allow your child to withdraw funds, but do assure them of a ride to the bank anytime they wish to make a deposit no matter how large or small, advise money experts at Parents magazine.
Teens who work for their money learn to manage finances better
Once your teen is at the age where they want extra cash to spend on things like movies, video games, and trips to amusement parks with friends, it’s time to let them work for their money. Working as a teen myself made me really appreciate every dollar that came my way and left. Babysitting, lawn mowing, snow shoveling and early morning newspaper delivery are all jobs available in most neighborhoods. Teach your teen to budget time so work doesn’t interfere with their education. Show them they should take pride in their work and how they can save for themselves and the future or things that they want. Encourage them to look at the larger picture not just simple things like clothing; suggest a larger goal like a trip etc…
Show them encouragement and support in their saving goals by awarding them with a deposit for good grades and other mutually beneficial moments. I mean it is a great way to encourage them with their education and their personal goals and dreams!
How were you at managing money as a teen?